Plutocratic Socialism and the Corruption of Democracy

Mark Mitchell’s book is the latest title published under the FPR Books imprint. If this excerpt whets your appetite, do order a copy of Plutocratic Socialism: The Future of Private Property and the Fate of the Middle Class.

It is the crisis of the middle class, and not simply the growing chasm between wealth and poverty, that needs to be emphasized in a sober analysis of our prospects.
—
Christopher Lasch

Anyone who studies politics must keep one vital principle in mind: power tends to expand and consolidate. If you lose sight of that fact, everything else will go out of focus. Political thinkers have long understood this axiom of power. James Madison, writing in The Federalist Papers, put the matter succinctly: “power is of an encroaching nature.” In light of this fact, he set out to describe the principle of separation of powers built into the United States Constitution. Of course, the underlying assumption is clear: consolidated power is dangerous and undesirable. When power is sufficiently consolidated, the practical consequence is tyranny.

That having been said, any adequate conception of politics requires sufficient power to make collective action possible. If power is absolutely diffuse, political institutions cannot function. If it is absolutely unified, politics will die. Power, then, is necessary but dangerous. Human communities require it but must at the same time constantly guard against power’s natural tendency to unify and grow.

Institutional structures can provide some measure of protection. The U.S. Constitution delegates specific powers to the three branches with the hope that those branches will jealously guard their power against the inevitable encroachments of the others. They “check” each other. The federal structure of our government is also intended to provide the same insurance: the states are tasked with checking the expansion of the national government. However, these sorts of institutional checks are no guarantee. In fact, it is likely that they will fail if two other conditions do not exist. First, Madison admitted that “a dependence of the people is, no doubt, the primary control on the government.” By this he meant that virtuous and vigilant citizens are the best means of checking the expansion of power. The second condition is a vibrant middle class characterized by the ownership of private property. These two ideals are related, for the ownership of property calls forth certain virtues that make self-government possible. The virtues of self-control, independence, generosity, thrift, and neighborliness are fostered, at least in part, by a culture of private property. Ultimately, the Founders understood something that we, too, must grasp: property and power are inseparable.

Our constitutional order assumes a populace of property owners, a middle class whose virtues provide the necessary ballast to support our republic. Our founders imagined strong communities, strong families, and independent citizens capable of self-government. They knew if the people degenerate into an insolent plutocracy on the one hand and a disgruntled, insecure, proletarianized mass on the other, the American experiment in self-government would become increasingly fragile and
eventually collapse.

This unraveling is happening before our eyes. A plutocracy—that is, rule by the wealthy and their surrogates—is emerging as large public and private entities exercise increasing power through both the law and the market. This is characterized by an incestuous union of Big Government and Big Business, neither of which has the interests of the citizen-consumer in mind. As I write, the government is expanding its reach to compel citizens to submit to an array of mandates including Covid protocols, racially charged educational curricula, climate-change standards, pervasive surveillance, and militarized police forces, all ostensibly justified by our fears. At the same time, corporations wield their power by aggressively promoting a radical social agenda and in the process depriving consumers of such basic goods as privacy or a platform for free speech. Employees who don’t toe the line retreat into fearful silence or lose their jobs. As the wealth gap grows, insecure citizens clamor for economic security via government programs, subsidies, and guarantees. Political and economic insecurity provides the opportunity for the plutocrats to entrench their power by means of handouts that only temporarily mask the underlying problems. Trillions in deficit spending assuage present demands at the expense of future freedom. Indeed, we are exchanging the freedom of our descendants for the illusion of security today. They will be justified in destroying the statues we erect to honor ourselves.

Yet wealth is not sufficient for gaining access to the current plutocratic class. What is also necessary is a particular outlook, a plutocratic psychology, if you will. This illusory meritocracy is rooted in the false belief that wealth, or proximity to wealth, is an indication of special moral virtue. Not surprisingly, this belief manifests itself in a disposition of self-righteousness whereby those infected by it come to see themselves as superior to their fellow-citizens who are, alas, not wealthy or connected. They come to see themselves as above the law, for law is necessary for controlling the common citizen, but it is certainly not something that should limit those possessing the moral superiority that wealth would seem to denote. Thus, the plutocracy in America today is characterized by both insolence and self-righteousness, and it is not conveniently confined to either the Left or Right.

I must emphasize here that this is not a polemic against wealth or an argument seeking to justify the state-sponsored reallocation of wealth in the service of some utopian vision of equality. Wealth is not the problem. Any society where citizens are free to buy, sell, and to own and dispose of their property will result in inequalities. Christ told us that the poor would always be among us. So too the wealthy. The problem I am addressing is a particular view that claims a connection between wealth and moral virtue and a political structure that privileges the wealthy over everyone else. There is a world of difference between a society consisting of a majority of citizens who are middle class and who exercise a controlling influence over the political landscape and a society consisting of a shrinking middle class and growing wealth disparities. In such a situation, the wealthy will invariably possess power disproportionate to their virtue. America today is confronted by this unhealthy social and political situation.

A plutocratic class, if it is to survive in a democratic age, must placate insecure, propertyless citizens with state-sponsored benefits that provide the illusion of security. This welfare state will, in time, generate explicit calls for socialist policies and programs. Plutocratic Socialism, then, is a system built on a symbiotic relationship between two seemingly opposed classes: plutocrats and socialists. We are now witnessing this in America. Moreover, the newest iteration of socialism today has joined with the regnant social justice movement creating a toxic brew of social, political and economic pathologies—call it Woke Socialism.

It is important to appreciate the fundamental tension inherent in the union of plutocracy and woke socialism. Woke socialism is rooted in the claim that the world is sharply divided between two classes construed in various ways as the oppressors and the oppressed, the victimizers and the victims, the powerful and the weak. Plutocrats clearly hold the power and those deemed oppressed or marginalized—people of color, women, the poor, those identifying as LGBT, etc.—do not. It is at this point that things get dicey. Plutocrats must appear to make common cause with the oppressed lest they forfeit the perception of moral authority. To do so they must either 1) engage in a cynical charade where they merely pretend to uphold the cause of the oppressed, 2) enter into a deeply conflicted position where a sense of guilt induces acts and words of sympathy for the oppressed all while desperately clinging to the wealth, status, and power that seems to implicate them as oppressors, or 3) convince themselves that their special virtue and status provide them with the unique opportunity to do important work on behalf of the oppressed thereby legitimating their own relentless hold on wealth, status, and power. In short, they must either descend into abject hypocrisy, succumb to the psychic turmoil rooted in self-hatred, or delude themselves with a vision of their own moral superiority and indispensability. The perilous nature of these gambits is glaring.

Some have taken to using the term “woke capitalism” to describe this dynamic, but that does not accurately capture the reality of our moment. We must distinguish between woke capital, which surely exists, and woke capitalism, the existence of which is less obvious. Today corporate, cultural, and political elites harass those who do not bow to the woke agenda. They combine their power to enforce the compliance of private individuals and businesses and to bully local and state officials. The problem, then, is not capitalism run amok. Instead powerful elites use private capital and political positions to 1) leverage government, corporate, and cultural power to compel compliance with the woke agenda, and 2) they champion policies and direct public resources to placate the demands of the populace that is haunted by economic and social insecurity. The incestuous relationship between public and private power indicates the presence of something far different from a free market of goods, services, and ideas.

The combination of plutocracy and insecure, aggrieved citizens can also produce the conditions for revolution. Glaring abuses of power, inequalities widely deemed unjust, and a citizenry deeply distrustful of basic institutions are lethal ingredients and seem to justify those clamoring to dismantle the system by, among other things, abolishing private property and thereby destroying free market capitalism, both of which are seen as primary impediments to a better world.

There exists, then, a natural continuum from an ever-expanding welfare state to the abolition of private property. We might call it “the socialist continuum.” Once aggressive welfare policies are implemented (as opposed to a modest and limited social safety net), the sacred idea of property will gradually dissipate. Confiscation and redistribution undermine the status of property and kindle dreams of a world without private property. After all, if property is the most prominent and concrete expression of inequality, and if inequality is seen as synonymous with injustice, one can presumably eliminate inequality—and injustice—by eliminating property.

Although our current plutocratic class pays lip service to democracy, self-reliance, and liberty, the rhetoric hides the reality where fear, economic insecurity, and petulant demands for autonomy foster the conditions of dependence. The plutocracy naturally favors the welfare state, for it is an effective means of both pacifying insecure citizens and fostering the illusion of plutocratic virtue. However, when the people are organized and radicalized, they can seek to push the logic to its natural end, namely, the total transformation of society and the transformation of property, which if successful, would destroy the plutocracy. Thus, the plutocrats will anxiously dole out enough baubles to keep the citizens distracted, enough services to blunt the despair, and enough fear-mongering to keep them cowering all in an effort to prevent the socialist continuum from playing out to its logical conclusion. Socialist leaders will, in the process, find ways to gain personal advantage from the immense flood of resources pouring in their direction.

Plutocratic Socialism, then, represents a strange alliance that would have stunned and dismayed Marx. It is as if the bourgeoisie and the proletariat decided to strike a secret pact and work together rather than allow their rancorous animosity to ignite a full-blown revolution. The leadership of both classes have much to gain by this seemingly bizarre arrangement. Plutocrats gain moral legitimacy, and socialists gain wealth, status, and power, ironically the very things cherished by the plutocrats. Perhaps this hidden dynamic is one reason why socialist revolutions rarely, if ever, come to a successful termination but instead remain stuck in a “transitional” phase where the plutocrats—and those fortunate individuals drawn into their orbit—secure the wealth, status, and power while the revolutionary energy of the masses is allowed to burn out in frustration.

There is another way. A broad middle class, characterized by the ownership of private property, is the only real means by which citizens possess both the power to govern themselves and the virtues necessary to do so. This suggests a crucial insight: if wealth is unduly concentrated, power will be unduly concentrated as well. The inverse is also true. If property is broadly owned, power will be broadly distributed. The latter ideal is the essence of a healthy democracy.

Many utopian schemers today imagine a world where the inconvenience of private property is but an unpleasant memory and where technocratic wizards make life safe, pleasant, and worry-free for everyone as long as they submit to the “reasonable” standards of the elites. These self-righteous planners see property, at least for everyone other than themselves, as a source of unrest, inequality, and injustice. However, a plutocratic socialism energized by a woke agenda of race ideology and climate hysteria is not a path to liberation but to certain degradation and bondage.

Today we stand at a crucial moment in our nation’s history, and our actions will determine our collective fate. We can choose dependency and servitude at the hands of our plutocratic masters or we can choose the freedom that is inseparable from a society shaped by the ownership of private property. The first step is, as always, to see clearly. We must recognize the basic facts of our condition if we hope to have any chance of providing a remedy. Our analysis must begin with a simple, yet profound, axiom: private property and political freedom stand or fall together.